DEMOGRAPHIC DIVIDEND
The UN report, world population prospects 2022 forecasts that the world’s population will touch eight billion this year and rise to 9.8 billion in 2050. India's population will surpass China by 2023 and continue to surge.
India is getting a demographic dividend that will last nearly 30 years.
INDIA’S POTENTIAL WORKFORCE
Consulting firms are optimistic about India’s future
DELOITTE INSIGHTS:
India’s potential workforce to rise from 885 million to 1.08 billion people over the next two decades from today and remain above a billion people for half a century betting that these new workers will be much better trained and educated than their existing counterparts ..Next 50 years will therefore be an Indian summer that redraws the face of global economic power.
MCKINSEY &COMPANY’S report-India at Turning Point, believes the “trends such as digitization and automation, shifting supply chains, urbanization, rising incomes and demographic shifts, and a greater focus on sustainability, health and safety are accelerating to create $2.5 trillion of economic value in 2030 and support 112 million jobs, or about 30% of the non-farm workforce in 2030.
THE ECONOMIST is also optimistic. In its May 14, 2022 issue it said- As the pandemic recedes, four pillars are visible that will support growth in the next decade, the forging of the single national market, an expansion of industry owing to the renewable energy shift and a move in supply chains away from China, continued pre-eminence in IT and a high tech welfare safety net for the hundreds of millions left behind by all this.
The following are bullish about India-
FINANCIAL TIMES-Demographics: Indian workers are not ready to seize the baton, and believe that India’s bad infrastructure and poorly skilled workforce will impede its growth.
RAND Corporation’s report, China and India, 2025, A comparative Assessment, commissioned by the U.S Secretary of Defense endorses this view. As well AS Organization for Economic Co-operation and Development (OECD) remain bullish about India.
INDIA‘s POSITIVE ASPECTS
It is still a young country and in a much better position to transform itself compared to China in 1970.
- The IT technologies now available in India, and most importantly the Internet run have matured exponentially. Many things right from video conferencing to instantaneous payments and satellite imaging are getting better and cheaper by the day.
- Thanks to COVID -19 pandemic, we know these can revolutionize learning and transform Indian society at an astonishingly low cost, unimaginable through much of China’s economic liberalization.
- India’s administrative systems manage to deliver and its infrastructure is in far better shape today than it was for china at the start of its reforms. Nor did India impose the equivalent of China’s one-child policy that has seen China suffer the consequences of a prematurely ageing society with a skewed gender ratio.
DEEP DIVIDE IN CHINA
India does not have a Hukou system which in China tethers rural folk to rural parts creating a deep divide between small and prosperous urban china and a much larger, very deprived rural China.
As Scott Rozelle at Stanford University‘s centre on China’s Economy and Institutions writes in his book co-authored with Natalie Hell, Invisible China –How the Urban-Rural Divide Threatens china‘s Rise, Thanks to the Hukou system disincentivising migration to urban areas, only about 36% of china’s overall population is urban and fully 64% is rural.
The huge divide between urban and rural China according to Rozelle, is almost unbridgeable.
To bring the best out of the demographic dividend, India needs to invest massively in quality schools and higher education as well as health care-sectors it has neglected for decades-across India on an unprecedented scale, literally in trillions of rupees between now and 2050 when it would have reached the apogee of population growth.
